From 1 June 2025, Decree 70/2025/ND-CP substantially amended Decree 123/2020 on e-invoices, and every change touches the buyer right to deduct input VAT. FDI companies need three points clear: what makes an e-invoice valid for deduction, which mechanism corrects a defective invoice, and in which cases deduction still works without an e-invoice.
Legal basis
- Decree 123/2020/ND-CP on invoices and documents, as amended by Decree 70/2025/ND-CP effective 1 June 2025: expanded and tightened e-invoice rules, including invoices generated from cash registers connected to the tax authority for retail sales directly to consumers.
- Deduction conditions under Article 14 of VAT Law 48/2024/QH15: input VAT is deductible with a lawful VAT invoice, and an e-invoice must carry all mandatory fields, the correct buyer name and tax code, and be retrievable on the tax authority system.
- Error handling under amended Article 19 of Decree 123/2020: error types are distinguished to choose an adjustment or a replacement invoice; an error only in the buyer name or address is notified to the tax authority and does not require a replacement invoice.
- Substitute documents in special cases: the import-stage VAT payment voucher and the voucher for tax paid on behalf of a foreign contractor are deduction bases that do not need a seller e-invoice, under Article 14 of Law 48/2024.
- The payment condition keeps its independent role: a valid e-invoice of VND 5 million or more still needs accompanying non-cash payment evidence to qualify for deduction.
What Decree 70/2025 changed that matters for deduction
The change that matters most to buyers is the integrity and retrievability of the e-invoice: it must be transmitted and stored in the required data standard and be visible on the tax authority lookup portal. An invoice issued through a non-compliant solution provider, or one flagged by the tax authority as no longer valid for use, gives the buyer no deduction basis even if it looks complete on its face.
Decree 70/2025 also pushes cash-register e-invoices in retail. For an FDI company buying from retailers in that regime, a lawful cash-register invoice is ordinary input evidence, but accounting staff should instruct employees to keep the proper converted copy or the original electronic file rather than only the temporary till printout.
Correcting a defective invoice: adjustment or replacement
The choice of correction mechanism follows the nature of the error. Errors affecting the amount, the tax rate or the buyer tax code fall into the group requiring an adjustment or replacement invoice under Article 19, with a written agreement between the parties where the invoice has already been declared. An error only in the buyer name or address, with the tax code correct, is handled by notification to the tax authority and the buyer keeps the deduction.
Deduction timing follows the final correct invoice. The buyer should not deduct on a defective invoice that belongs to the replacement group, because on inspection the tax authority checks the invoice status on its system and denies the corresponding tax.
No e-invoice: when deduction is still possible
Two situations allow deduction without a seller e-invoice. The first is imported goods: the deduction basis is the import-stage VAT payment voucher in the company name. The second is a transaction with a foreign contractor under the withholding regime: the basis is the voucher for tax paid on the contractor behalf by the Vietnamese company into the state budget.
Outside these two situations, a domestic purchase without a lawful e-invoice has no deduction basis, even with a contract and full bank payment evidence. The cost may still be considered for corporate income tax under its own rules, but the input VAT is effectively lost. Procurement procedures should therefore block payment to suppliers that have not issued a compliant invoice.
Frequently asked questions
What is new in e-invoice rules that affects VAT deduction?
Decree 70/2025/ND-CP, effective 1 June 2025, amended Decree 123/2020 and stresses the validity and retrievability of e-invoices on the tax authority system, while expanding cash-register invoices for retail. For buyers, an invoice that cannot be looked up, or one from a seller whose invoices are flagged as no longer valid, creates no deduction basis, so invoice status should be checked before declaration.
How is a defective e-invoice corrected?
Under amended Article 19 of Decree 123/2020, errors in the amount, the rate or the buyer tax code must be corrected with an adjustment or replacement invoice in the prescribed sequence, with a written agreement between the parties where needed. A wrong buyer name or address with the correct tax code only requires the seller to notify the tax authority, with no replacement invoice, and the buyer keeps the right to deduct.
Can input VAT be deducted without an e-invoice?
Only where special documents substitute for an invoice: imported goods use the import-stage VAT payment voucher, and foreign contractor transactions use the voucher for tax paid on behalf. A domestic purchase of goods or services without a lawful e-invoice cannot be deducted, even with a contract and complete payment evidence.
The invoice was already sent to the buyer before a wrong tax code was found: what now?
A wrong buyer tax code is a core error and cannot be fixed by simple notification. The seller must issue a replacement or adjustment invoice under amended Article 19 of Decree 123/2020, the parties record the error in a minute, and the buyer declares the deduction only on the final correct invoice. If the buyer already deducted on the wrong invoice, adjust the return of the relevant period as soon as the new invoice exists.
This article has been quality-reviewed by the FLAW AI Legal Council
